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Williams, 34, came out of retirement a year ago to sign with the Magic. He averaged 6.0 points, 3.6 assists and 1.5 rebounds while appearing in all 82 games last season. The West Virginia native retired in September 2008.

"Jason played very well for us last season," said Magic general manager Otis Smith. "He provides veteran leadership to our backcourt and knows what it takes to win. We are happy to have him back on our team."

Williams burst onto the scene as the seventh overall pick of the Sacramento Kings in 1998. His highlight-reel passes and crossovers made him a fan favorite, overshadowing his respectable numbers.

In 761 career games, the Florida product has logged 10.8 points and 6.0 assists with Sacramento, Memphis, Miami and Orlando.